1)Airwave Airlines, a recently established airline, has a frequent flyer program to compete more effectively with established airlines

1)Airwave Airlines, a recently established airline, has a frequent flyer program to compete more effectively with established airlines. To differentiate its program from those of its competitors, Airwave adopted a plan based on number of flights, rather than kilometres flown. The program offers a free return flight for every seven paid return flights taken during a three-year period. During 2013, Airwave recorded 21000 flights and revenue of $4.2 million. How should Airwave account for its frequent flyer program? Give reasons.

2)your company's static budget and actual results for the month of August. Your company has one experienced employee and two less experienced workers. It normally takes an employee two hours to clean an office. The company pays $35 per office to the experienced employee and $25 per office to the other less experienced employees. Wages are increased at the rate of inflation and are only awarded in December Office Cleaning Inc. August 2020 Budget 240 Actual 260 Office Cleaned Revenue 50,400 65,000 Variable Costs Costs of Supplies Labour Total Variable Costs 1,230 6,900 8,130 1,330 7,500 8,830 Contribution Margin 42,270 56,170 Fixed Costs 5,000 5,000 Operating Income 37,270 51,170 Your boss has asked you to analyse the results and answer the following Four (4) questions. 1. How many offices, on average, did Office Cleaning Inc. budget for each employee? How many offices did each employee clean? 2. Prepare a Flexible Budget for August 2020 3. Compute the sales price variance and labour efficiency variance for both the experienced and less experienced employee. 4. What other information would you want Office Cleaning Inc. to gather if you wanted to improve operational efficiency?